INEOS shutdown of Scottish refinery may cut 45% of UK crude production

Ineos Group Holdings is shutting the 210,000 bpd Grangemouth oil refinery and petrochemical site before a strike this weekend tha could halt 45 % of the United Kingdom’s crude production.

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By LANANH NGUYEN & LAURA HURST

LONDON (Bloomberg) -- Ineos Group Holdings is shutting the
210,000 bpd Grangemouth oil refinery and petrochemical site before a strike
this weekend that could halt 45 % of the United Kingdoms
crude production.

The company is progressively stopping units before a 48-
hour industrial action planned by Unite union workers,
scheduled to begin on October 20.

Were currently going through a safe shutdown of
the site, Richard Longden, a spokesman for Ineos, said by
phone from London. The units will be brought to a cold
status by the time the strike action starts.

Grangemouth workers held a two-day strike in April 2008 that
cut North Sea oil output and disrupted fuel supplies across
Scotland. The site supplies power and steam to BP's neighboring
Kinneil processing plant, which handles oil from the
companys Forties Pipeline System gathered from more than
80 offshore fields. FPS is scheduled to load 387,000 bpd of
crude in October, according to a shipping program obtained by
Bloomberg news.

Union representatives and Ineos will meet for talks mediated
by the United Kingdoms Advisory, Conciliation and
Arbitration Service after discussions ended without resolution,
Unite said in a statement. The discussions are scheduled in
Glasgow, Scotland, according to the United Kingdom Department
of Energy and Climate Change.

Forties Output

Were in touch with Ineos to establish the
possible impact of the shutdown, Robert Wine, a
London-based spokesman for BP, said by phone. Operations at the
Kinneil plant will depend on the outcome of negotiations
between Ineos and the union, he said.

Forties output averaged 382,000 bpd this year, according to
loading programs obtained by Bloomberg News. The United
Kingdoms average crude production was 850,000 bpd this
year, data from the International Energy Agency show. Forties
is the most abundant of four crude grades that make up the
Dated Brent benchmark used to price more than half the
worlds crude. The others are Brent, Oseberg and
Ekofisk.

We have been monitoring the situation very closely,
Cameron Ramos, a spokesman for the Department of Energy and
Climate Change, said by phone from London. This
isnt something that has come as a surprise.

The Grangemouth refinery is jointly owned by Ineos
Group Holdings and PetroChina, while Ineos is the sole owner of
the petrochemical site.

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